So what do I expect in the financial markets over the next couple of weeks? I expect a gradual drifting lower for stock prices and a gradual move upward in oil prices as analysts report on how lng it’ going to take to restore supply. I’m not looking for a big plunge or correction–more like a reconsideration of today’s enthusiasm.
I already own shares of Cheniere Energy (LNG) in my Jubak Picks Portfolio and my Volatility Portfolio. I will add another position in my 50 Stocks Portfolio on on Monday, March 23.
On Monday Qatar’s state-owned energy company said it would halt production of liquefied natural gas, cutting off a large share of the world’s supply of the fuel. Qatar supplies 18% of global LNG.
No one knows, of course, how the attack on Iran will play out in either the medium or long term. The energy and financial markets were closed for the weekend, so they’ve given us relatively subdued feedback on the events. It will be “interesting” to see on Monday how the markets price in the risks to global oil and natural gas supplies. The war is taking place against a backdrop of low and falling oil and natural gas prices on abundant supplies. As I look ar the early market price reactions, though, one “fact” pops out at me. If you’re looking to profit from a speculation on the worst case scenario–by which I mean the shutdown of the Strait of Hormuz to global shipments of oil and natural gas, natural gas looks to be the most lucrative bet on this scenario.
I already own Equinor in my Dividend and Jubak Picks portfolios. Today, January 16, I’m adding the shares to both my Volatility Portfolio.
I hope you’ve done well in the stock market in 2025. As of the close on December 29, the gain for the Standard & Poor’s 500 for 2025 was 19%. Which makes it especially important to search for any potential candidates for tax loss selling to off set any realized gains you took in 2025. (Like, for example, if you traded in and out and in again on Nvida (NVDA) or Broadcom (AVGO).)
The rules for generating a tax loss give you just two more days to sell in 2025.
In the aggregate a K-shaped economy can deliver pretty good aggregate numbers in a situation like this. No matter what pressures and pain individuals or classes of consumers are feeling. An aggregate like GDP growth, for example, can still look pretty solid and reassuring to economists, Wall Street strategists, and central bankers.
As long that is, as the pain and the reduced spending in the lower 40% on consumers by income doesn’t increase by enough to overwhelm the positive spending trends by the top 10%. (The other danger in a K-shaped is that something will go wrong that discourages spending by the upper 10%. Like a big drop–more than a 5% dip–in stock prices. More on that danger in a coming post.) Right now, energy prices are climbing fast and far enough put more pressure on the most pressed of consumers. Could higher energy prices be the dollars that breaks the K-shaped economy?
If the United States (and other technology economies such as Japan and Europe) are serious about reducing China’s dominance in the crucial minerals called rare earths (and I believe they are), then you need to realize as an investor that in the next five years all roads to that goal lead through Lynas Rare Earths (LYSDY) and MP Materials (MP). Both stocks are up hugely in 2025, but I think you need to own them. Buy half a position now and add on any dip, or dollar cost average over the next 12 months (with a bigger monthly buy on any dip) but own them. I have owned Lynas in my Jubak Picks Portfolio since October 18, 2022. The position is up 88% in that period as of the close on December 8. The ADR is up 78% in 2025 to date. On a dip I will add it to the long-term 50 Stocks Portfolio. MP Materials is up 298% in 2025 through December 8. Tomorrow, December 9, I will add MP Materials to my Volatility Portfolio. On a dip I will add it to the Jubak Picks Portfolio.
Pick #5 for the energy crisis is Generac
The government shutdown will push gold past $4,000 an ounce. That would be a double in less than two years. Gold closed at $3908 an ounce on Friday. Gold was hot before the shutdown because it benefits from lower interest rates that reduce the opportunity cost of holding it, and from higher inflation, which reinforces its role as a store of value. It also rises when the dollar falls, both because it’s priced in dollars and because it competes with cash. All three factors were working in gold’s favor. And then came the shutdown, which further weakened faith in the U.S. dollar.
You don’t need the Department of Energy or the Energy Information Administration to tell you we have an energy crisis. (Good thing since they’re shut down with the rest of the Federal government today.) All you need to do is look at your electricity bill. This summer monthly home electric bills jumped in Trenton, New Jersey, for a typical home by $26. In Philadelphia, it increased about $17. And in Columbus, Ohio, it spiked $27. And your monthly bill doesn’t capture the full damage. In California,residential electric rates are up 62% in five years. In Maryland residential rates are up 54% in five years. Most frustratingly–and most importantly for investors–those bills don’t explain the nature of the crisis.
Or more accurately “crises.” Because we’re the middle of three, overlapping and interlocking energy crises. That are playing out on different timeframes that range from NOW to the next 5 to 10 years. It’s that last point that’s critically important for investors. Because to make money–and let’s be clear: like in all crises there’s money to be made investing in these three crises–you’ve got to understand the nature of each crisis and buy into it at the right time. Not so early that you sell in disappointment because your profits haven’t arrived yet. Not so late that all themes tasty profits are gone. This Special Report is about untangling the 3 energy crises, giving you a timeline for investing in each, and then calling out 10 picks you cause to profit from theses crises. Ya, ready?
Foreign central bank holdings of the precious metal have topped holdings of U.S. Treasurys for the first time since 1996, according to Bloomberg data
